In a move to bolster its AI capabilities and challenge the dominance of NVIDIA, AMD has announced the acquisition of server maker ZT Systems for a hefty $4.9 billion. The deal will see AMD pay 75% of the acquisition price in cash, with the remaining 25% covered by AMD stock. This strategic acquisition underscores AMD’s commitment to the burgeoning AI market and signifies its ambition to become a major player in the space.
ZT Systems, a privately held company specializing in custom AI infrastructure, possesses deep expertise in building computing solutions for some of the world’s largest AI hyperscalers. Although the company keeps its clientele confidential, it is known to work with tech giants like Microsoft, Meta, and Amazon, all major players in the AI landscape.
The acquisition of ZT Systems is a significant step for AMD as it seeks to compete with NVIDIA’s comprehensive AI ecosystem. NVIDIA currently reigns supreme in the AI market by offering not just the AI chips themselves, but also the entire hardware and software infrastructure necessary for building powerful AI servers. This encompasses everything from motherboards and interconnects to high-speed networking, providing a complete solution for AI developers and businesses.
AMD’s lack of a similar comprehensive ecosystem has been a hurdle in its AI ambitions. However, the acquisition of ZT Systems addresses this gap by bringing AMD access to ZT’s expertise in designing and building custom AI infrastructure. This allows AMD to offer complete AI server solutions, including its own Instinct MI300 series AI accelerators, competing directly with NVIDIA’s offerings.
The acquisition holds significant potential for AMD. It not only empowers the company to offer end-to-end AI solutions, but also strengthens its position in the data center market, which is undergoing a rapid transformation driven by the increasing adoption of AI.
Dr. Lisa Su, AMD’s Chair and CEO, highlights the strategic importance of the acquisition, stating, “Our acquisition of ZT Systems is the next major step in our long-term AI strategy to deliver leadership training and inferencing solutions that can be rapidly deployed at scale across cloud and enterprise customers. ZT adds world-class systems design and rack-scale solutions expertise that will significantly strengthen our data center AI systems and customer enablement capabilities. This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps. Combining our high-performance Instinct AI accelerator, EPYC CPU, and networking product portfolios with ZT Systems’ industry-leading data center systems expertise will enable AMD to deliver end-to-end data center AI infrastructure at scale with our ecosystem of OEM and ODM partners.”
The acquisition of ZT Systems marks a significant move for AMD in its quest to challenge NVIDIA’s dominance in the AI market. With ZT Systems’ expertise and AMD’s own growing AI portfolio, the company is poised to become a major force in the rapidly evolving landscape of AI infrastructure.
